Tuesday morning, Stuart Jeffrey, an analyst with Japanese brokerage house Nomura, reiterated his neutral rating target for the stock while lowering his target price to $530 from $660. The analyst's concern is that Apple iPhone gross margins have peaked at the current 55% and could drop to 40% which is the historical peak for mobile handset manufacturers. Jeffrey sliced his earnings forecast for Apple to $45.54 a share in fiscal year 2013, down from his older estimate of $51.68 a share. For the 2014 fiscal year, the analyst sees Apple scoring a profit of $49.69 a share, down from his original estimate of $55.58 a share. Jeffrey sees Apple reporting a down year in 2015 with profits of $48.99 a share, down from an earlier $54.90 a share forecast and off from 2014's expectations.

Jeffrey is concerned about profit margins for the Apple iPhone

The analyst says there isn't much Apple can do to turn things around in the short term and that even the introduction of an Apple iPhone 5S and a Apple iPad mini with a Retina display would not add much to demand. He does add that the downside risks are limited by Apple's low P/E ratio, or the possibility of a dividend increase. Some factors that could potentially boost the stock like a new Apple iPhone release or a refresh of iOS, won't happen until the second half of the year. The release of a low-priced Apple iPhone would only serve to lower margins which would be a negative for the stock. Jeffrey calls the release of OS7 critical but added that management changes at the company might limit any new features of the OS build.

"Launch of iPhone 5S or iPad mini with Retina display could be positive but seems unlikely to materially boost demand. iOS7 launch may prove more critical (likely due in June), but recent management changes may limit extent of enhancements."-Stuart Jeffrey, Nomura Securities

I think Apple is in a worse position than a matter of margins would indicate. Apple has a fundamental problem with its UI. Imagine if the Android community were stuck (in its entirety) on say, Froyo. That is the problem for Apple with iOS. Users aren't faced with a compelling reason to go out and buy a new iToy, since they just got one 6 (or whatever) months ago, nothing has changed. gMaps has solved the problems of iMaps. iUsers are seeing how other flagship phones are shipping with 4.5+ inch displays and the argument about not being able to use a phone one-handed with a display larger than 4 inches is wearing thin.

The problem for Apple is stagnation. Stagnation of its sales engine is much more serious than margins being lower than desired.

Its all over the news. Apple isn't "cool" anymore, if you say so. People are becoming aware of other great options. iOS is just so stagnated people are getting tired of it.... That's why SOFTWARE makes all the difference. Windows is charging and Android keeps on innovating.

I am an iOS user who, for months now, have been considering jumping ship to Android (GS3). IMO... the iOS has become boring and dated. The new features that Apple crams into every iteration are just too minor and useless for me to make a switch from my current iPhone 4 to the latest 5. I need more... This is what needs to happen...

- A complete refresh of iOS is a MUST! The lame notification system and old school look has to be retired and reworked.

- A larger screen; The jump to a 4" display was a lame attempt at competing with lager 4+" displays. IMO it failed.. there really isn’t that much of difference to make it worth the hype.

1. Both those points both of you made are opinions. You both can give better supporting arguments.

2. While it is intuitive, it is on that android level. A lot of things on android just seem to take fewer clicks. The way it multitasks and can close apps, a central back button , home and multitask button, a swipe keyboard , removing unwanted notifications. Widgets etc.

3. If a large screen isn't always best , that means a small isn't always best either. Plus, the only people saying that sort of thing is people that haven't used bigger screens.

No doubt. No one is calming that there aren't people that love iOS. Nothing wrong with that. BTW, You're always so defensive about Apple. When generally compared to other OS's iOS is a lot less immersive because, of it's simplicity and boring compared to the other options on the market. I've been saying it for years now but iOS, is an app drawer. Any Android or WP user will tell you, app drawers are boring lol. iOS is a operating system for people that are new to smartphones. It's the high school of OS's. When you first start learning it you're like this is awesome but, after you've seen everything you're ready to move on to the next level. Windows Phone is college and Android is a lucrative career.

Let me just say that I absolutely love iOS and my iPhone but have become bored of using it. I am not playing down how well the OS performs and works in its own simplicity. I'm just saying that I need something fresh to keep my interset...

I have co-workers that have showing me what their Android can do that my iPhone cant and I must say its impressive and not gimmicky. I love the intergration with Google and its use of notifications....

I just strongly feel that Apple is lossing ground quickly and keeps dishing out the same stuff every release. I think many users feel the same as me.

#1 is incorrect... I do have full integration capabilities with Google services but I do not have a Nexus device, I have an HTC DROID DNA. In other words, one doesn't have to have a Nexus to have full Google integration.

Apple won't stay here for long from $750 they have tumbled to $ 500 mark, this is really very great news, these bullies and cowards needs to taught a lesson!
Fanboys, you must be an Apple cult or hippie z0πbi£$„...?

lmao you are such a mindless fanboy that just follows the hating trend

''hey look at me i hate apple too guys''

is that what you scream and shout kid? apple are in a position where they can turn it all around. the problem is there arrogance which apple users admit as most apple users now are more reasonable then the android swarm. couple apple trolls left but they are taken seriously

''you must be an Apple cult or hippie z0πbi£$''

nah kid im a tech lover whatever i want i get regardless of os or brand etc. i dont feel the nned to be a complete idiot and act like a product is the devil reborn

I want Apple to succeed in the market. I want them to fail miserably in the courtroom.

Apple have the attitude that because they succeed in a market, all aspects of that market belong to them. They need some humility, the humility they seem to have lost since Microsoft d saved them from oblivion.

I like to see apple fail with these reasons. First, when a company is aware of failing, it will put more effort on it's products rather than other things like patenting. Second, apple is too arrogant. It deserves the stock price drop. Third, apple is used to reserve some technologies for the next generation products. Sometimes bud fixes are called improvement or innovation. There are still many reasons that I want apple get shocked.

I wouldn't just say I want them to fail. I just dislike their anti competitive practices and the fact that the competition is well ahead.

Should apple make I more compelling product that is competitively priced, I would buy it. When I first used my first gen iPod touch it was really impressive. Really sold build and great features. But the competition has caught up and passed them. They just need to compete better and not bitter.

I don't want to see apple fail or go away, but things need to change. They need to focus more on beating the competition with actual innovation and giving their customers what they want, not what apple says they need. They need to take better care of their customers after the sale. I'm not necessarily talking about with their hardware, but with their services. My animosity for apple comes out of an issue with itunes that was the fault of their software. I tried everything they told m to fix it & when that didn't work I was supposed to redownload the content on my dime, even though I wasn't at fault.

Apple, WP, RIM, & Android need to remain in the mobile sphere to spur innovative spirit. If one platform has a stranglehold on the market they can get lazy & innovation will slow to a crawl. And with the patent situation we currently have it makes it extremely difficult for a new platform to come onto the scene. So I'm not looking for them o fail, but they need to focus more on the customer rather than on their ego IMHO.

I bet you anything that OS 7 will be a close offshot of android. Apple will do widgets just like they did the notification bar and clame that nothing like it has ever been done like it before them. Then sue.

They really need to add more features. iMaps and Siri just dont cut it. If they continue this downward spiral and release a thinner 5s with a 13mp camera and a quad core only, nobody can tell the difference.

I literally walked past an iPhone 5 at the store an thought it was the 4 until I walked up to it. They had a 4 and a 5 right next to each other and I stood there looking at the similarities from 2 generations ago.

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